Stormy Daniels’ controversial attorney Michael Avenatti has been hit with a $10-million judgment Tuesday in U.S. Bankruptcy Court after he reneged on his promise to pay $2 million to a former colleague.
Judge Catherine Bauer of U.S. Bankruptcy Court in Santa Ana ordered Eagan Avenatti to pay the $10 million to Jason Frank, a lawyer who used to work at the Newport Beach firm.
“At this point, that’s what’s appropriate,” Bauer said at a brief hearing.
L.A. Times reports: To settle his law firm’s bankruptcy, Avenatti personally guaranteed in December that it would pay Frank $4.85 million. But he and Eagan Avenatti failed to pay the first $2 million installment that was due last week, triggering Tuesday’s judgment.
The firm is also delinquent on $440,291 in back taxes, penalties and interest that Avenatti promised would be paid last week, Assistant U.S. Atty. Najah Shariff told the bankruptcy judge.
Avenatti and his firm had accepted the deadline under an agreement reached with the Internal Revenue Service in January. It requires Eagan Avenatti to pay the IRS a total of $2.4 million.
More than half of that was for payroll taxes that the law firm withheld from employees but did not turn over to the government. Avenatti, who has blamed the lapse on an unnamed payroll company, was personally responsible for holding the money in trust for the IRS, according to the U.S. attorney’s office in Los Angeles.
Avenatti paid an initial installment of $1.5 million. Shariff told the judge that the government would soon file a motion demanding payment of the additional money that was due last week.
Avenatti accused the Los Angeles Times of “purposely confusing me with a separate legal entity that has no role in the Daniels case.”
“Irrelevant,” he wrote in an email responding to questions about the $10-million judgment and the missed tax payment. “Over blown. Sensational reporting at its finest. No judgment against me was issued nor do I owe any taxes.”
Avenatti has repeatedly sent emails to The Times about the Stormy Daniels case from an Eagan Avenatti email address, with Eagan Avenatti below the signature line.
The firm listed in court records as representing Daniels is Avenatti & Associates. In the bankruptcy case, Eagan Avenatti identifies Avenatti & Associates as one of its two owners; the other is attorney Michael Eagan of San Francisco.
Avenatti’s highest-profile client is Stormy Daniels, a porn star who says she had a one-night stand with Donald Trump in 2006.
In the 11 weeks since Daniels filed suit to void a nondisclosure agreement that bars her from talking publicly about the alleged tryst, Avenatti has become one of the president’s chief antagonists, often appearing on television several times a day.
He has also become a target of Trump supporters, some of whom welcomed news of the $10-million judgment.
“Guy has a habit of being a scum bag,” conservative blogger Mike Cernovich wrote on Twitter.
Frank, who attended the bankruptcy hearing Tuesday, declined to comment on the judgment in his favor.
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